Gold and silver both finished the week having posted losses, however these losses were of no great significance. To be fair, the week as a whole did not offer up much in the way of fresh talking points. What we did see, however, was that stocks as well as the US Dollar regained some of their footing and bounced back up off of multi-week lows. For the time-being, however, gold and silver are still in control of the near-term technical advantage.
As we look ahead to the final week of April trading, you can bet that the economic data stream will pick up a bit. Whether this proves to be a good thing for precious metals or not, remains to be seen.
Geopolitics have not gone anywhere the last few weeks, and it seems as though that is going to remain the case for the foreseeable future. This week, investors were still very much concerned with what is going on on the Korean Peninsula and in Syria, however these worries have subsided a bit.
For one, the massive armada the United States promised it was sending to North Korea in response to recent missile launches actually ended up in Australia, thousands of miles from North Korea. This alone meant, for many people, that an imminent military engagement was not very likely. Still, investors are not completely turning away from the peninsula.
North Korea responded this week with fiery rhetoric and some propaganda videos, alluding to an imminent missile strike on the United States.
In addition to this, there are some lingering concerns with regard to an increasing of the United States’ involvement in Syria. These concerns are becoming less serious, but all of this is contributing to ongoing safe-haven demand. So long as geopolitics remain in the headlines, gold and silver are likely to benefit.
Despite previously saying that she did not intend on holding hurried elections, Theresa May, Prime Minister of the UK, announced that there would be elections held in June. This announcement came as a surprise to many and sent the GBP flying downward. This is important to mention because it also marked the point when the USD bounced back off of multi-week lows. The greenback continued to perform well throughout the duration of the week, and this contributed to the losses gold and silver ended up posting.
To say that the week was without any momentous economic data would not be true. There was some economic data dealt, however it was mostly ignored by the marketplace. US manufacturing data that, admittedly, fell far short of expectations did well to help gold and silver fight off surging stocks, but not to any great degree.
In addition to this, the number of first-time claims for unemployment benefits rose last week by roughly 10,000. Though any rise in this statistic is not a good thing, the data was mostly ignored. What’s more, the 4-week moving average of claims, which is often viewed as a more accurate snapshot of the employment situation, was down by more than 4,000 claims. All things considered, it is easy to see why the weekly jobless claims report was mostly ignored.
Next week is likely to bring about a bit more economic data, and I would not be surprised to see geopolitics fade to the back-burner even further. Potentially, this could push spot values lower.